January 12, 2022

Crude Oil Nearing Recent Highs

 Black commodities moved higher on Wednesday, supported by a decline in oil supply shown by the American Petroleum Institute (API) and expectations that the contagion of the Omicron variant will not affect the recovery in global demand.

Ahead of the opening of the European session, US WTI crude futures traded higher at around $ 83.64 a barrel. Meanwhile, Brent oil traded up at $ 81.27 a barrel.

Federal Reserve (Fed) chairman Jerome Powell said he expects that Omicron's impact on the economy may be temporary, adding that the next quarter could be very positive for the economy after the surge in cases caused by the variance diminished.

Crude oil trade has doubled in 2021, reversing losses recorded when the beginning of the pandemic struck as all countries around the world reopened sanctions and economic activity went on as usual.

Meanwhile, API reported U.S. crude oil inventories dropped around 1.1 million barrels last week, missing expectations for a decline of 1.9 million barrels.

However, if official data from the government or the Energy Information Administration (EIA) also declines, it could be a decline for the seventh consecutive week for U.S. crude oil supplies.